SCHOOL OF BUSINESS MANAGEMENT

MBA-Banking Management (2011-2013)

Marketing Management

Under Guidance of

Prof. Hufrish Homavazir

Submitted by: Group 6

Sumit Agrawal A005

Shashwat Krishn A032

Shweta Mehani A035

Neha Mittal A038

Harsih S A048

Neha Singh A056

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

(Deemed University)

(Certificate to be signed by the Guide under whom the candidate has worked)

Certified that the project titled Marketing Strategies of Pantaloons presented by

Sumit Agrawal A005

Shashwat Krishn A032

Shweta Mehani A035

Neha Mittal A038

Harsih S A048

Neha Singh A056

represents their original work which was carried out by the group at the Narsee Monjee Institute of

Management Studies, Mumbai under my guidance and supervision during the period from June, 2011

to September, 2011.

Name of guide: Prof. Hufrish Homavazir

Signature of guide:

Date:

The Company

Pantaloon Retail (India) Pvt. Ltd., a part of the Future Group, is a leading Indian operator of multiple retail formats. It is present in both the value and lifestyle segment of the Indian consumer market. 

Company Timelines

1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, India’s first formal trouser brand.

1991 Launch of BARE, the Indian jeans brand.

1994 The Pantaloon Shoppe – exclusive menswear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multi-brand retail outlets across the nation

1995 John Miller – Formal shirt brand launched.

1997 Company enters modern retail with the launch of the first 8000 square feet store, Pantaloons in Kolkata.

2001 Three Big Bazaar stores launched within a span of 22 days in Kolkata, Bangalore and Hyderabad.

2002 Food Bazaar, the supermarket chain is launched.

2004 Central - India’s first seamless mall is launched in Bangalore.

2006 Home Town, a home building and improvement products retail chain is launched along with consumer durables format, Ezone and furniture chain, Furniture Bazaar

2007 Future Group crosses $1 billion turnover mark.

2008 Total operational retail space crosses 10 million square feet mark.Future Group acquires rural retail chain, Aadhar present in 65 rural locations.

Leading Formats

Key FactsHeadquarter: MumbaiOperating Space: 16 million square feetTotal Cities covered: 73Employees: 33500Annual Revenue/ Turnover: Rs. 60,190 million ($1,312.14 million) (FY2010)

Lines of Business

1. E-Tailing2. Food3. Fashion4. Home Solution5. Telecom & IT6. General Merchandise7. Leisure & Entertainment8. Wellness & Beauty9. Books & Music

Future Group

Pantaloon Retail (India)

Pvt. Ltd.

Pantaloon - chain of fashion

outlets

Big Bazaar - hypermarket chain

Food Bazaar - supermarket chain

Central - chain of malls

Key products and services

Products:AccessoriesBooksClothesElectronic productsEntertainment productsFood productsFootwearFurnitureGeneral merchandiseHealth and beauty productsSports goods

Brands:Food:

Brew BarCafe BollywoodFood BazaarSports Bar

Fashion:aLLBig BazaarBlue SkyBrand FactoryCelioCentralEthnicityFashion @Big BazaaarLee CooperNavarasPantaloonsPlanet Sports

Home and Electronics:Home Towne-zoneHome BazaarCollection iElectronics BazaarFurniture Bazaar

Telecom and IT:Gen MOne MobileM Port

General Merchandise:Big BazaarBlue SkyBrand FactoryCentralKB’s Fair Price

Leisure and Entertainment:

Bowling Co.F 123

Wellness and Beauty:

Fit & HealthyStar Sitara

Books & Music:Depot

PantaloonShoe Factory

Navaras

The Product

Pantaloons, chain of fashion outlets covering apparels and related accessories.

Pantaloons Fresh Fashion stands out as a fashion trendsetter, on the lines of how fashion is followed internationally.

The first Pantaloons was opened in Gariahat, Kolkata in 1997.

Products Transitions

Category Transition

Pantaloons Categories

Selling retailing a mix of external brands while at the same time introduced its

own private brands (Bare, John Miller)

Selling external brands

Family Store Fashion store with an emphasis on 'youth' and clear focus on ‘fresh fashion’

Casualwear

Ethnicwear

Formalwear

Sportswear

SWOT AnalysisStrengths Weaknesses

Presence in 73 cities and 1000 stores across India

Presence of internal brands such as John Miller, Bare Denim, and Schullers reduces dependency on external brands

First organized retail established in India and country’s largest by revenue

A fully IT enabled billing system

Dominant player and continuous organic and inorganic growth

In house supply chain management in the form of Future Supply Chains Solutions (FSCS) limited, thus a strong control over its distribution channel

Diverse portfolio covering different age and income groups

High volume of sales leading to economies of scale

Strong brand equity and high credibility in Indian scenario

Connected with the cultural delicacies of a different regions

Loyalty card and incentive schemes creating repeat customers

All set for backward integration which will improve margins

Pantaloon does not have a global footprint, and hence limited or no reach in overseas markets. Even in domestic market, the presence is low in several markets

Pantaloons sell products across many sectors and hence, lacks the focus of its competitors

Due to versatile products portfolio, inventory cost is high

Despite high footfalls, the conversion ratio in a retail outlet is lower than in normal stores

High debt increasing financial risks

Opportunities Threats

Growing middle class band, especially the youth and working population creating a broad target segment. Estimated number of middle class people is over 60 crores in 2010.

Penetration into the untapped markets which include the lower-middle income group. Today top 6 cities provide 66% revenues for organized retail, providing great potential.

Upcoming concept of rural retailing

Mushrooming of malls across the country

Opportunities in online ventures like futurebazaar.com

Regular festivals in the country which can call for an intelligent discounting and promotional events

Increased FDI in organized retail and foreign collaboration which may lead to efficient logistics and infrastructure

Replacement of Bar codes by RFID’s will help in reducing time latency and shop lifting

Venture into upper urban class market through tie-ups with designer outlets

Exposed to the risks of economic downturns

Farmer suicides in the country which in turn leads to government regulations favouring these farmers and hence, higher costs of procurement for the company for cotton

Presence of multiple competing stores in a single place due to mushrooming of malls

The “Union culture” in the country which can occasionally lead to arm twisting by labour union

Increasing number of domestic competitors such as Globus, Shoppers stop, Westside, Lifestyle

Govn. nod on FDI in retail sector lead to entry of foreign players in India like Walmart, Carrefour

Low availability of prime locations for retail due to saturation in cities and due to high demand there is high cost leading to low margins

Price wars between competitors, price cuts can lead to profit reduction

Consumer tastes are fluctuating and hence, can hamper sales

Resistance and competition from small, unorganized retailers

Marketing Mix

Introduction

Pantaloons is among the India’s largest chains of fashion stores. With the strong focus on “fresh look, feel and attitude”, it strives to meet the fashion needs of several age and income groups of Indian society, majorly for the “young at hearts” section.Probably the oldest retail apparel store, pantaloon has presence not only in big cities but also in towns across the country. Pantaloon has wide variety of casual wear, ethnic wear, formal wear and sportswear.

Place Strategy

For any retail store, the most important factor is the location of store. The location not only defines the store in long run, but also influences its layout, brand, merchandizes, even its prices. Pantaloon has strong presence across the country mainly in all posh localities of all metros mostly owing to its years of presence in the market. The ease of accessibility to these stores also has a role to play in the success of the business. The company operates over 16 million square feet of retail space, has over 1000 stores across 73 cities in India.

Product Strategy

The product aspect is the most important thing in the mix. Having the right products that meet the needs and wants of the customers is critical. For Pantaloons, the products under consideration are Apparels. Pantaloon applies the concept of category management for its day to day merchandising where range of products are broken down into discrete groups of similar or related products (product categories). The various products offered can be divided as brands internal to Pantaloons and Non Pantaloon brands. Each segment can be further divided into Men’s and Woman’s wear and each of these categories having sub segments like Formals, Casuals and Ethnic wear in each. Each of these product category heads now have their own set of brands (Category management). Some popular in house brands include John Miller, Annabelle, UMM, Agile, Honey, Lombard. Pepe, Trisha, Lee Cooper are some of the major non pantaloons brands. This mix of diverse products offers customers a good set of alternatives to choose from depending on need, occasion and income.

Promotion Strategy

Initially perceived as a family store, today pantaloon has a strong focus on young fashion trends and fresh look. Different promotional events and strategies pantaloon has followed over years are

1. Pantaloon Femina Miss India: Associating itself with the probably the biggest lifestyle event in the country establishes its leadership in the market.

2. Loyalty program: Gift vouchers and loyalty cards (Green Card) has resulted in repeat customers over the years. Even the privilege memberships has resulted in loyal customers

3. Others: Other promotional strategies like markdown and gift offers during the festival seasons have also resulted in higher sales.

Price Strategy

Since the customer base of pantaloons is largely the middle income group, pantaloon has to maintain the price effectively low. Pantaloon has been successful in maintaining providing

the affordable fashion to everybody. Pricing is a critical issue and is driven by large turnover and low margins. Similarly markdowns during several events further have resulted in attracting even the lower-middle income groups into the store.

Competition Analysis

The preferences of the branded Western and Indo-Western apparels are on the rise specifically among the young working population of India. Few players who have been catering to the branded market are Park Avenue, Arrow, Allen Solly, Van Heusen, Pepe, Levis, Killer, Provogue etc. These brands have revolutionized the dressing habits of the youth. The changing demographics coupled with increased disposable income and changed spending habits of the Indian consumer has led to the entry of many big and small players in the retail space. Pantaloon is facing stiff competition from retail houses like Shoppers Stop, Lifestyle, Westside, Vishal Mega Mart etc. Let’s focus our attention on some of its main competitors.

Shoppers Stop has grown from a single brand shop in 1991 to a Fashion and Lifestyle store for families. Shoppers Stop is a household name, known for its superior quality products, services and above all, a complete shopping experience.

Its marketing strategy and products derive mainly from their mission-“Nothing but the best” and “We are responsible for the goods we sell”. The customer profile of Shoppers Stop is very neat and well defined. It caters to the customer representing SEC A & B+; falling between the age group of 16 to 40. The target customers are upper middle class and upper class.

Product

Shoppers Stop offers several international and national renowned brands such as Arrow, Pepe, Nike, Mattel et al. It also offers its in house brands such as STOP, Kashish, LIFE, Vettorio Fratini, Elliza Donatein and Acropolis. These products are exclusive in terms of the brand value and social status the buyer enjoys. Based on the analysis of Shoppers Stop, the team found that the retail house unlike others focuses more on the quality and status of the product instead on the latest trends or fresh fashion.

Price

The price is one the controllable factors in the retail industry where the power remains with the retailer. Usually the price at Shoppers Stop is determined based on competition especially for in house brands. But considering the portfolio of products that are on offer at Shoppers Stop, the prices are on a high side and target markets very niche. Unlike Pantaloons, it believes in an annual sale and minimum advertisements and promotion.

Since its inception in 1999 in India, this subsidiary of the Dubai-based Landmark Group has grown to 25 stores in more than 15 cities. Positioned as a trendy, young, colourful and vibrant store, Lifestyle is primarily youth-centric catering to all the latest trends in fashion arena.

Product

It has very innovative and unique range of products. CODE which is the men’s and women’s apparel cluster boasts of vitamin-enriched shirts ‘Perma Crease’, trousers that don’t require ironing ‘Best Whites’, ethnic wear ‘Melange’, Fame for Ever’ latest trends for the youth , ‘Ginger’ for women and ‘Junior’ for kids.

Price

Keeping in mind the target segment of upper class and upper-middle class urban youth, prices are high and comparable to the range of Shoppers Stop and Pantaloons. Even its in-house brands cater to premium segment and hence, draw premium price.

Analyzing the low price competitor

It is one of the oldest retailers in the country and currently operates in 110 cities in India with over 183 stores. Vishal Mega Mart positions itself based on two parameters-affordable quality and contemporary styling. Another distinctive feature of Vishal is that it manufactures most of the apparels it sells; thus its portfolio consists of mainly in-house brands. With a broad target group, it has presence everywhere-from metros to tier II and tier III cities also. Its target group includes people from SEC B & C with the family monthly income of Rs.10000 or more. The target age group is also very large; Vishal offers apparels for children, adult as well as the old people.

Product

Vishal caters to almost the entire range of apparel industry ranging from children to old population and from male to female. In-house brands of Vishal include Soil, Fumes, Paranoia, Elvis Bogner, Chlorine, Zeppelin etc. Vishal offers variety clothing for every member of the Indian family.

Price

Since Vishal offers its own manufactured products, it has a cost advantage over other retailers. The prices are kept low without compromising on the quality keeping in mind its target segment and its mission of affordable quality. It follows discount retailing, Buy One & Get Two Free etc. models of pricing.

Customer Relationship Management

Why CRM CRM at Pantaloons – Green Card

•Want to focus both on acquisition &

Retention

•To convert daily footfalls into

loyal customers.

• Extraordinary service andcustomer

satisfaction

• Increase customer share

•FASHION FRIDAY (additional 5% discount

to allmembers)

• Instant discounts for every time you shop at

Pantaloons

•Regular updates on themes, collections and

promos

•Special invites to themost happening

events

•Tracking of buying behavior-Customers are

informed for theirpreferences (whenever

there are new stocks of their preferred

brands).

Target Segment Price Matrix

Upper Shoppers Stop & Lifestyle

Upper Middle Overlap

MiddleVishal

Pantaloons

Lower

Price 250 600 800 1000 1250

Critical Suggestions

Pantaloons need to handle its customer more efficiently. Its billing counter and Waiting line model is slower than shoppers stop or lifestyle. The number of changing rooms needs to be increased so as to handle the customer efficiently during the festive seasons.

Customer loyalty can be enhanced by offering exclusive facilities to green card members like: resting lounge, parking facility, home delivery of merchandise.

Pantaloons scores on consistently churning out latest and ‘fresh’ fashion trends coupled with high degree of sales offers and promotions. More recently, its own private labels have become the key profit drivers. It should also focus on international premium brands to make its target group more inclusive and at par with players like Shoppers Stop and Lifestyle.

Though competition is stiff and growing rapidly, it has been successful in ‘Gaining the maximum share of the consumer’s wallet’. This is due to economies of scale (huge customer base), good product line-up, mature supply chain management and in-house real estate and IT management capabilities. Since the retail formats and models are being emulated by other players, it needs to continuously innovate in order to beat competition.

Pantaloon needs to overcome its weaknesses and gain on the opportunities. As it has maximum debt among its competitors, it needs to lower its debts. In view of its rapid expansion, there is risk on the sustainability of the model and meeting the ever increasing customers’ expectations. Too much fragmentation (Brand Factory etc) can be a risk. It should move ahead keeping in mind a scalable model which can provide a quality shopping experience.

THANK YOU

Source of Information:

http://www.pantaloonretail.in/index.asp

http://www.shoppersstop.com/index.jsp.vr

http://www.lifestylestores.com/

http://pantaloon.futurebazaar.com/indexPantaloon.jsp

http://www.ibef.org/home.aspx